2018 Machinery Tax Deductions- Are You Eligible?

If you need to update your production equipment, now is the time. Dim Weight Solutions wants to make your company aware of some important 2018 tax breaks from which your company could benefit.

Section 179 | Deduction Amounts

Section 179 of the United States Internal Revenue Code allows a taxpayer to elect to deduct the cost of certain types of property on their income taxes as an expense, rather than requiring the cost of the property to be capitalized and depreciated.

The Code’s deduction limit is set at $1,000,000 for 2018, which is good on both new and used equipment. To take advantage of this deduction, the equipment must be financed or purchased between January 1, 2018 and December 31, 2018 end-of-day.

The total amount that can be spent on equipment is $2.5 million before the deduction available is reduced on a dollar for dollar phase out (up to $3.5 million). The spending cap is an incentive that benefits small to mid-size businesses who will have the opportunity to make investments that might normally have been delayed.

Bonus Depreciation | 100% for 2018

Bonus Depreciation is generally taken after the spending cap of Section 179 is reached. The Bonus Depreciation is set at 100% on qualified assets for 2018. Bonus Depreciation is not offered every year so 2018 is the time to take advantage. For the first time, this Bonus Depreciation also applies to used qualifying used property.

Improved Cash Flow

The intent with this deduction is to incentivize businesses to purchase equipment and invest in themselves. Capital investments are, by definition, undertaken with an eye on long term expansion or upgrades to production capacity. If you are considering growing and expanding your business or facilities, this deduction lessens the tax burden while improving cash flow.

For a full list of qualifying equipment, you can visit www.section179.org . Our Associated Packaging Reps are also happy to answer any questions that you may have regarding new equipment in your facility and how it can affect your deductions.